New technologies like non-fungible tokens (NFTs) could help artists get a better deal from selling their music by cutting out the middleman.
NFT-based streaming platforms are likely to help artists receive their fair share of revenues, as they allow the distribution of music directly to listeners without intermediaries charging a fee, according to Saxo Bank’s “Outrageous Predictions 2022: Revolution”.
NFT-based music streaming projects are set to take off next year, CoinTelegraph reported. One of these is Audius, a blockchain music platform backed by Katy Perry, The Chainsmokers and Jason Derulo.
Saxo Bank cryptocurrency analyst Mads Eberhardt said mainstream music streaming platforms such as Spotify and Apple Music take a substantial cut, which, together with the cut paid to labels, is 75% or more of the total revenue.
“These models don’t guide individual subscribers’ fees to the actual music an individual subscriber listens to,” Eberhardt said.
“The use case for NFTs could prove particularly compelling in the next step for the technology for content generators in the music industry as musicians feel unfairly treated by the revenue sharing models of the current streaming platforms like Spotify and Apple Music.”
Merck Mercuriadis, the founder of the Hipgnosis Songs Fund and former manager of artists such as Elton John, Beyonce and Guns N’ Roses, told Reuters that the blockchain, which keeps a ledger of transactions across a network of computers, can bring a new level of transparency to music royalties.
“Someone like Nile Rodgers, whose songs have done incredibly well for 40 years … every six months, (he’ll) get a statement from Sony (NYSE:SNE) that’s 10,000-pages long and has billions of microtransactions on it,” Mercuriadis said in an interview at the Reuters Next conference. “In the future, with NFT and blockchain, those billions of transactions will be able to come back to you in real time.”
Mercuriadis said NFTs could also provide a new type of collectible for music fans, such as music or videos, for the same price as a traditional tour book sold at concerts.
These more engaging experiences are “an important part of the future”, he said.